The IRS recently announced the 2024 cost-of-living adjustments to various benefit and contribution limits applicable to retirement plans. The IRS modestly increased the applicable limits for 2024. The following limits apply to retirement plans in 2024:
- The limit on elective deferrals under 401(k), 403(b), and eligible 457(b) plans increased to $23,000.
- The limit on additional catch-up contributions by participants aged 50 or older remains at $7,500. This means that the maximum amount of elective deferral contributions for those participants in 2024 is $30,500.
- The Internal Revenue Code (“Code”) Section 415 annual addition limit is increased to $69,000 for 401(k) and other defined contribution plans, and the annual benefit limit is increased to $275,000 for defined benefit plans.
- The limit on the annual compensation that can be taken into account by qualified plans under Code Section 417 is increased to $345,000.
- The dollar level threshold for becoming a highly compensated employee under Code Section 414(q) increased to $155,000 (which, under the look-back rule, applies to HCE determinations in 2025 based on compensation paid in 2024).
- The dollar level threshold for becoming a “key employee” in a top-heavy plan under Code Section 416(i)(1) is increased to $220,000.
We have compiled a chart summarizing the key limits below, including how they compare with those in the previous year. For a printable version of the chart, please click here.
| COMPENSATION AND BENEFITS LIMITS | |||
| 2024 | 2023 | 2022 | |
| 401(k)/403(b) Plan Deferral Limit | $23,000 | $22,500 | $20,500 |
| Catch-Up Contributions (401(k), 403(b) & Governmental 457(b) Plans) | $7,500 | $7,500 | $6,500 |
| Defined Contribution Dollar Limit | $69,000 | $66,000 | $61,000 |
| Defined Benefit Annual Limit | $275,000 | $265,000 | $245,000 |
| Pay Threshold for Determining Highly Compensated Employee | $155,000 (for determinations in 2025) | $150,000 (for determinations in 2024) | $135,000 (for determinations in 2023) |
| Annual Compensation Limit | $345,000 | $330,000 | $305,000 |
| 457(b) Plan Deferral Limit | $23,000 | $22,500 | $20,500 |
| Social Security Taxable Wage Base | $168,600 | $160,200 | $147,000 |
Contact your Faegre Drinker benefits attorney with questions or for assistance with implementing the new retirement plan limits.
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